Shaun Polczer, CALGARY: North American natural gas producers are buckling under the weight of bearish fundamentals. US firms Chesapeake Energy and ConocoPhillips are the latest to slash spending and cut production in their respective unconventional-gas plays.
Chesapeake said it was responding to market realities, as it hacked its 2012 operating budget by two-thirds, to about $1 billion from $3.1 billion last year.
The Oklahoma City-based company, which produces about 9% of US gas production, said it will shut in up to 1 billion cubic feet a day (cf/d) of output and pare back capital spending allocated to dry-gas shale plays, such as the Haynesville, in Texas and Louisiana. In addition, it plans to cut the number of rigs it has drilling by half, from 47 to 24 in dry-gas plays, and defer tie-ins of new wells, to delay the onset of new production.
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